Federal Risk Mitigation

Posted By Charles Feldmann || 27-Jan-2017

As the senior team leader in our law firm’s cannabis practice group
I have been recommending caution, awareness and the ability to quickly
pivot - to all of our firm’s marijuana clients. Managing a client’s
federal risk in this industry is something that requires vigilance and
daily analysis and has been the top priority of my law practice over the
last 8 years.

This week we saw Israel (who is a decade plus ahead of the United States
in cannabis research and its marijuana medical industry) move to decriminalize
cannabis and its Agricultural Ministry announced it would invest the equivalent
of 2.1 million dollars into the Israeli marijuana biochemistry and research fields.

Back in the United States, Jeff Sessions the nominee for Attorney General
seems to be headed towards taking the United States in a very different
direction. He submitted formal answers regarding his potential new policy
towards the growing states’ medical and commercial cannabis industry.

“While I am generally familiar with the Cole memorandum, I am not
privy to any internal Department of Justice data regarding the effectiveness
and value of the policies contained within that memorandum… I will
certainly review and evaluate those policies, including the original justifications
for the memorandum, as well as any relevant data and how circumstances
may have changed or how they may change in the future.”

“I will not commit to never enforcing Federal law. Whether an arrest
and investigation of an individual who may be violating the law is appropriate
is a determination made in individual cases based on the sometimes unique
circumstances surrounding those cases, as well as the resources available
at the time.”

A recent federal court ruling that a Congressional rider prevents the Justice
Department from going after people complying with state medical marijuana
laws “is relatively recent, and I am not familiar with how other
courts may have interpreted the relevant appropriations language or the
Ninth Circuit’s opinion. As an emerging issue, that is one that
will need to be closely evaluated in light of all relevant law and facts…
I will conduct such a review. Of course, medical marijuana use is a small
part of the growing commercial marijuana industry.”

On “good people don’t smoke marijuana“: “My words
have been grossly mischaracterized and taken out of context… I
was discussing the value of treating people for using dangerous and illegal
drugs like marijuana, and the context in which treatment is successful.”

“I echo Attorney General Lynch’s comments [on marijuana being
illegal], and commit, as she did, to enforcing federal law with respect
to marijuana, although the exact balance of enforcement priorities is
an ever-changing determination based on the circumstances and the resources
available at the time.”

“I will defer to the American Medical Association and the researchers
at the National Institutes of Health and elsewhere about the medical effects
of marijuana. Without having studied the relevant regulations in depth,
I cannot say whether they may need to be eased in order to advance research;
but, I will review this.”

I remain very concerned about the new Trump Administration’s upcoming
reactions towards the marijuana industry. Blue states that did not vote
for President Trump and who are now pursuing commercialized marijuana
policies may not be a top concern for his administration or for his new
Attorney General. Which of the current recreational marijuana states actually
voted for President Trump? Some say an almost $7 billion dollar industry
cannot be unwound. I disagree. In the grand scheme of the economy, $7
billion dollars is not enough to thwart a new surge in conservative law
enforcement efforts. It would not take a lot of effort for the new Attorney
General to revoke the Cole memo and issue new policy letters to all of
the state US Attorneys with an eye towards reeling in the spreading commercialized
marijuana industry.

Vigilance and federal risk mitigation is warranted more than ever.

Charles Feldman is the cannabis practice group team leader for MJ Business
Attorneys. For assistance or advice in managing the upcoming changes to
federal marijuana policy, please contact him and MJBusinessAttorneys.com